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CALIFORNIA Gov. Arnold Schwarzenegger (R) says he has a plan to fix the state's troubled government. His detractors call it a blind power grab. Voters may soon be the final word.

Can Schwarzenegger Reshape CA Government?

CALIFORNIA Gov. Arnold Schwarzenegger (R) came into office with a promise to "blow up the boxes" of state government. Now, less than a year later, he is looking to make good on that vow by proposing the most sweeping changes in government operations in decades. And while previous efforts to overhaul California's bloated bureaucracy have achieved only limited success, many observers feel the current prospects for change have never been better. 

 
    Schwarzenegger's 275-member California Performance Review (CPR) team, comprised of state employees, outside consultants and top aides, released its findings last Tuesday in a 2,547-page report that encompasses virtually every segment of state government. The panel's conclusion was rather harsh: "Once the envy of the nation, today our state government fails the people of California, and it fails the men and women who have given their careers to its service."
    Many of the panel's specific recommendations are aimed at making government more manageable by consolidating or eliminating state agencies, departments, boards and commissions that significantly overlap or duplicate each other. For example, the three agencies that currently handle tax collection -- the Franchise Tax Board, the Board of Equalization and the Employment Development Department -- would be combined into a single agency. In all, 118 of the state's 339 boards and commissions would be cut and 90 state agencies would be consolidated into 11, which would result in the elimination about 12,000 state jobs. Some of the CPR's other key proposals include letting residents renew their driver's license and apply for welfare online, joining the multistate lottery, raising the age requirement for kindergarten to 5 years or older, and requiring community service from students at public colleges and universities. The CPR's authors claim that adoption of all 1,200 of their various proposals would save the state $32 billion over five years. 
    But the plan spurred criticism even before its official release last week, with several of its recommendations leaked to the media the week before. Democratic lawmakers immediately criticized the review process for being too secretive -- with much of the information-gathering conducted behind closed doors and panel members bound to confidentiality agreements -- and for allowing businesses with a financial stake, like Microsoft, Hewlett-Packard and EDS, too much influence at the expense of environmental and other public interest groups. 
    Schwarzenegger denied that claim, insisting the public would be given ample opportunity to comment in a series of hearings beginning this month. The governor also defended the panel's consultation of private interests, stating, "There are many of the corporate world that are very smart at reorganizing, and we of course talked to them also because we want to get their input." 
    The report also includes a listing of the corporations and lobbyists that were consulted, which some praised. But Democratic State Treasurer Phil Angelides said that without knowing specifically what each contributed, it was "like getting the player roster without a score card." Angelides and other lawmakers contend that the lack of information about how the review team operated makes the panel's findings suspect -- including the projected $32 billion in savings. Angelides, who is considering a run for governor in 2006, has called on Schwarzenegger to release a full record of all the meetings that were held in connection with the review, asserting that the governor "needs to keep the commitment he made last year: to do everything in the open. No decisions in the dark." 
    Some critics have also characterized the plan as a power grab by Schwarzenegger, pointing to its calls for ending legislative review of gubernatorial appointments and consolidating the state bureaucracy into 11 cabinet-style departments that would report directly to the governor. Assembly Speaker Fabian Nunez (D), who has butted heads with the governor repeatedly of late,  remarked, "As we review the operations of government, we need to be careful that, in the name of efficiency...we don't put too much control in the hands of the few at the expense of the many." 
    Schwarzenegger denied such claims, stating, "It has nothing to do with power at all. I think it has to do with efficiency and giving the people what they deserve." 
    But some analysts warned that the massive consolidation of state agencies could actually cost the state more in the short term by creating unwieldy "super departments" with their own efficiency problems. An official with the nonpartisan Legislative Analyst's Office said that while consolidation might pay off in the long run, "if you are going to do it because you are in a budget crisis and you want to save money in the near term, you are probably barking up the wrong tree there." A few also questioned particular agency reorganization proposals, such as the consolidation of the Air Resources Board, the Water Resources Control Board and several others into a new Department of Environmental Protection. Bill Magavern, a lobbyist with the Sierra Club said, "The air board is probably California's most effective environmental agency," adding that it has made the state the "national leader in air-quality safeguards." 
    Still others claimed the report contains ideas that have already been rejected in the past, such as increasing state lottery jackpots in an effort to attract more players, a proposal which failed to make it out of legislative committee this year because of resistance from the teachers' union, which fears it could end up depleting money for schools. The plan also calls for the reinstatement of a ten-year old tax break for manufacturers to purchase equipment, which was considered a failure by the Legislative Analyst's Office and allowed to expire this year. 
    Despite criticism, Schwarzenegger embraced the plan at last week's press conference, stating, "We will make every use of the California Performance Review to create an efficient, responsible and responsive government -- a 21st century government of the future for California." The governor, however, declined to endorse any specific proposals, saying, "I have to first look at the report, and then I can comment on some of the things that I believe in or I don't believe in." 
    Schwarzenegger has appointed a 21-member commission that will hold five public hearings on the plan around the state, beginning Aug. 13 at U.C. Riverside. After that, the governor will have several options. One is to urge the Legislature to adopt the plan in its entirety. That prospect seems unlikely, however, given the level of criticism the plan has generated -- and comments such as those of Senate President Pro Tem John Burton (D): "It isn't going to come to fruition. They clearly are biting off a lot more than anyone could conceivably chew." 
    Schwarzenegger could also try to pass the plan through an initiative campaign. But Bruce Cain, director of the Institute for Governmental Studies at U.C. Berkeley, said if the governor tried to do that through a single omnibus measure, it would likely face a court challenge. Trying to pass multiple ballot measures could also be difficult. Cain said the smart thing for Schwarzenegger to do would be to find out which proposals the Legislature is willing to adopt and get those out of the way, and "then if there's something that has no chance of going through the Legislature, if he really believes in it, and he polls it, and it would pass...do that through the initiative." 
    Tony Quinn, a former Republican consultant and co-editor of a publication that covers state and federal elections, said the governor will probably have no choice but "to go to the people" because the "entire political establishment in Sacramento" will resist legislative action. "They make their living knowing how the boxes work. They don't want the boxes to change," Quinn said.
    History is also against the governor. According to the Little Hoover Commission, an agency created in the 1960s to help reorganize government, 29 reorganization plans have been proposed since 1968. The only successes to date have been fairly narrow in scope and low in controversy -- such as the merger of the State Police with the Highway Patrol -- neither of which are qualities that apply to the CPR recommendations. 
    But "going to the people" is something that comes naturally to Schwarzenegger. He has already won big at the ballot box once this year, convincing voters to approve his historic $15 billion bond package, a triumph many observers feel he would have duplicated had he been able to take the budget to the voters. Whether that momentum translates into now being able to totally reshape California government -- and possibly starting a national trend -- remains to be seen. (SACRAMENTO BEE, LOS ANGELES TIMES, NEW YORK TIMES, CONTRA COSTA TIMES, ORANGE COUNTY REGISTER)
 

-- Compiled by KOREY CLARK

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Budget & taxes

CASINO BATTLE GOES TO RI VOTERS: The RHODE ISLAND House voted July 30 to override Gov. Don Carcieri's (R) veto of a referendum on a proposed Indian casino, a major victory for the casino's backers, Harrah's Entertainment and the Narragansett Indian Tribe. But the fight is far from over, with the battle line now shifting to the state's voters, who will decide the issue on Nov. 2. Harrah's says it plans to spend at least $2 million on "an aggressive educational campaign" will include both radio and television spots. One of the major themes of the campaign will be the millions of dollars in tax revenue that are being lost to CONNECTICUT because Rhode Island and MASSACHUSETTS residents spend their money at Constitution State casinos. The Rhode Island casino's main opponent, Lincoln Park, one of the state's two video-slot parlors, is planning its own campaign, which a spokesman said could cost "easily up to $3 million." Lincoln Park officials are also hoping for a favorable ruling from the state Supreme Court on the constitutionality of the referendum. The ruling -- requested by Gov. Carcieri -- would only be an advisory, however, and both sides expect the referendum to go forward. Rhode Island voters are fairly evenly divided on the issue, a recent Brown University Poll showing 47 percent favored the casino, while 43 percent were opposed. (PROVIDENCE JOURNAL)

LA RETIREMENT SYSTEMS COULD RECEIVE MILLIONS: A pair of LOUISIANA retirement systems could be among the nation's biggest beneficiaries of a federal class-action suit that stemmed from the same cancer drug scandal that led to Martha Stewart's prosecution for insider trading earlier this year. Bristol-Myers Squibb Co. announced July 30 that it had reached a settlement in the $300 million suit filed in U.S. District Court in New York, alleging it had artificially inflated its profits and stock price at the expense of its shareholders. The suit also charged the pharmaceutical giant with misrepresenting the strength of its $2 billion investment in ImClone Systems, the company whose failure to secure FDA approval for its promising cancer drug Erbitux sent its stock plummeting Dec. 28, 2001 -- the day after Martha Stewart sold off her ImClone shares on a tip from the company's founder, Samuel Waksal. Lousiana's Teachers Retirement System and State Employee Retirement System were among Bristol-Myers Squibb's largest stockholders, along with retirement systems in MICHIGAN and CALIFORNIA. Observers say the process of determining exactly who gets what will likely extend into 2005. (TIMES-PICAYUNE [NEW ORLEANS]) 

BUDGETS IN BRIEF: OHIO voters rejected 77 of 103 school tax proposals last week, the highest number of property tax measures considered in an August special election in two decades. The 25- percent passage rate was also the lowest it has been in five years. School officials said they didn't believe the poor performance was purely the result of dissatisfaction with schools. As one put it, with school taxes being among the few voters are actually able to vote on, they "take out their frustration with a lot of other things on school levies." (ASSOCIATED PRESS, AKRON BEACON JOURNAL). * Although MAINE repealed its "snack tax" three years ago, a commission on public health just recommended the establishment of a "fat tax" on products perceived to contribute to obesity in the state. Maine has the highest ratio of overweight and obese people in New England, with about two-thirds of all adults falling into those categories (BANGOR DAILY NEWS). * The NEVADA Taxpayers Association announced last week it will sue to block the "Ax the Tax" measure from the November ballot if it is qualified by the Secretary of State, on the grounds that the petition used to solicit signatures for the proposal did not include the relevant sections of Nevada law as required by the state constitution. Nevadans for Sound Government, the group sponsoring the measure, which would repeal the $833 million tax increase passed by lawmakers last year, expressed dismay over the fact that a group called the Nevada Taxpayers Association would take action protecting a tax (LAS VEGAS REVIEW-JOURNAL). * NORTH CAROLINA is planning to auction off a working 1924 rail car that has been converted into an office. The Tar Heel State will place the car on Internet auction site eBay in the next month, with a minimum bid of $185,000. The state will place five other cars on the online auction block as well (NEWS & OBSERVER [RALEIGH]). 
 

-- Compiled by KOREY CLARK

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MISSOURI SHOWS HOLDEN THE DOOR: Oft-embattled MISSOURI Gov. Bob Holden (D) last week became the nation's first incumbent governor in a decade to lose his party's primary when state Auditor Claire McCaskill won a resounding victory and the chance to face off with Republican Matt Blunt in November. Dubbed "One Term Bob" by his opponents almost from the day he stepped into office, Holden's term was marked by a series of high profile troubles that dogged him throughout his campaign. Some were undoubtedly of his own making, such as the lavish $1 million inaugural ball that he later struggled to pay for. But other problems were not his fault, such as the economic slowdown that forced him to make numerous significant -- and unpopular -- budget cuts. He also saw Republicans take control of the Senate for the first time in 50 years, a key factor in lawmakers overriding three of his vetoes. That hat trick matched the total number of veto overrides in Missouri since the Civil War. (USA TODAY, ST. LOUIS POST DISPATCH)

PERDUE PASSES ON PORK: It has been a staple of GEORGIA politics for years. It has paid for band uniforms, ballpark lights, local sports teams, museums and fishing tournaments. It has even paid to repair a giant road sign shaped like a peanut. "It" is the governor's emergency fund, a taxpayer-fueled treasure trove of cash that is supposed to be used to help pay for the cost of fixing natural disasters, but has often instead been the bankroll used by Peach State governors for political handouts. So common was the practice over the years that many lawmakers routinely refer to it as a "discretionary" fund. But Gov. Sonny Perdue (R) has clamped down hard on the account, sending hordes of cash-seeking lawmakers away empty-handed and frustrated. This year alone Perdue returned $1.2 million unused dollars from the fund back to the state treasury, the second straight year he has issued the reimbursement. Although most lawmakers say they understand that the state's budget has made it a bad time to ask taxpayers to fund their pet projects, other lawmakers have cried foul, saying the spending isn't necessarily all pork. "An emergency fund might be used to help a rural county buy a firetruck," said Sen. George Hooks (D). "They have no ability to buy anything on their own." So far Perdue has not budged, saying that "When people find out you don't dance, they stop asking." (ATLANTA JOURNAL-CONSTITUTION)

LINGLE GOES "INSIDE" FOR TOASTMASTERS: It isn't unusual for HAWAII Gov. Linda Lingle (R) to spend time perfecting her stump speeches at a local Toastmasters event. Lingle joined the organization, which helps people become polished public speakers, more than a decade ago when she was a member of the Maui City Council. She liked it so much then that she eventually started her own chapter. But Lingle's most recent Toastmasters visit was a bit out of the ordinary, if only for its locale -- the Halawa Correctional Facility on the island of Oahu. Lingle addressed more than 30 chapter members, all of whom are also inmates at the facility. Event organizer Jeff Beard, who has mentored the chapter since its beginning in 1998, said the group invited Lingle for two reasons: her Toastmasters background and her belief that "we have to do something other than just lock them up." Speaking in a hot, poorly lit room, Lingle urged the group to continue working on improving their speaking ability, saying that inmates will eventually have to convince an employer why they should be given a chance and that "you need to be able to express to people why they should trust you." The governor told her audience that in spite of their past mistakes, "redemption is possible" with the proper skills. Lingle also listened to three inmate speeches, including one that urged her to consider his theories on prison overcrowding. While the event went off without a hitch, Lingle never lost sight of where she was, spending her 90 minutes constantly surrounded by a bevy of prison guards as well as her own security detail. The governor did not say if she would appear at any of the other three Toastmasters chapters in the Aloha State prison system. (HONOLULU ADVERTISER)

GOVERNORS IN BRIEF: WISCONSIN Gov. Jim Doyle (D) announced he will eliminate 504 more vehicles from the Badger State fleet. The move is part of an ongoing effort to reduce the total number of state-owned cars and trucks back to 1994 levels. It also brings to 1,073 the total number of vehicles cut from the state fleet, almost 15 percent of the 7,228 the state owned in February of this year. The first 54 vehicles from the list went on the auction block last week. With an average price tag of $4,000, the soon-to-be-gone vehicles could bring the state $4.3 million (MILWAUKEE JOURNAL-SENTINEL). * A new Quinnipiac University poll shows that NEW JERSEY Gov. James E. McGreevey's approval rating has fallen to 38 percent, a drop of seven percentage points in the past two months. The drop marks a sharp reversal of recent increases in the governor's popularity. The decline is blamed on recent scandals involving McGreevey's associates (PHILADELPHIA INQUIRER). * Gov. Olene S. Walker (R) declared UTAH to be in a state of agricultural disaster brought on by six years of drought. Walker also requested federal relief for impacted farmers in a letter to U.S. Secy. Of Agriculture Ann Veneman (SALT LAKE TRIBUNE). * COLORADO Gov. Bill Owens (R) vowed to fight a ballot measure that would do away with the Centennial State's winner-take-all-system of casting electoral college votes for president. Owen called the petition a "patently political attempt to win the vote for John Kerry." (ROCKY MOUNTAIN NEWS). 
 

-- Compiled by RICH EHISEN

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Bird's eye view

States adapting to a digital world 

Although well known as the home of the auto industry, MICHIGAN is also the most digitally-savvy state in the nation, according to a recent survey conducted by the Center for Digital Government (CDG), which tracks how states use emerging technologies. CDG chose the Wolverine State based on more than 60 measurements in four broad areas - service delivery, architecture and infrastructure, collaboration and leadership - and how states were using technology to better serve their citizens and streamline their operations. The map above shows the top 10 states in the order of their finish in the survey. Note that COLORADO and NORTH CAROLINA tied for 10th  position. 
 

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BUSINESS: The MICHIGAN Supreme Court overturns its own landmark 1981 decision and decides to sharply restrict governments from using the power of eminent domain to seize private land to give to other private users. Many cities and counties have used the Court's previous support of land seizures as a way to obtain blighted land for redevelopment. The original decision 23 years ago allowed the city of Detroit to take over thousands of homes, churches and private businesses on the city's east side so General Motors Corporation could build a new auto factory (DETROIT FREE PRESS). * NEW YORK Gov. George Pataki (R) vetoes legislation that would have raised the Empire State minimum wage from $5.15 to $7.15 per hour. Pataki said the bill would cost the state too many jobs (NEW YORK TIMES). * The CALIFORNIA Supreme Court rules that any wine labeled as coming from the Napa Valley must be made from at least 75 percent Napa-grown grapes. The ruling upholds a 2000 law that closed a loophole in similar federal regulation that exempted brands established prior to 1986 (SAN FRANCISCO CHRONICLE). 

CRIME & PUNISHMENT: The MASSACHUSETTS Supreme Judicial Court unanimously agrees to allow the names, addresses and photographs of the Bay State's most dangerous known sex offenders to be placed on the Internet. The ruling makes Massachusetts the 43rd state to list such information on law enforcement Web sites. The postings will be limited to Level 3 offenders, those persons the state Sex Offender Registry Board deems to be the most likely to commit more sex crimes (BOSTON GLOBE). 

EDUCATION: Education officials in ALASKA agree to allow disabled students to use dictionaries and computerized spell-checkers when taking the state's mandatory graduation exam. The agreement, which still requires court approval, would end one of many currently pending legal challenges to the high school exit exams (NEW YORK TIMES). * A federal appeals court rules that WASHINGTON schools which use race as a tiebreaker when assigning students to public schools violate the students' constitutional right of equal protection. The appeals court cited a 2003 U.S. Supreme Court decision involving the University of MICHIGAN that said admissions policies that use race may only be employed after considering race-neutral alternatives (SEATTLE TIMES). 

ENVIRONMENT: The ALASKA Supreme Court upholds a lower court's 2002 decision that blocked special protection for Cook's Inlet beluga whales under the state's Endangered Species Act. The high court's decision does not address whether the whales are actually endangered, but only whether the state used rational judgement in deciding not to protect the mammals (SEATTLE POST-INTELLIGENCER). * A federal court rejects a request from UTAH officials to bar the Skull Valley Goshute Indian tribe from entering into a partnership with a private firm to store thousands of tons of nuclear waste on reservation lands. A spokesperson for Gov. Olene S. Walker said the state will appeal the decision (SALT LAKE TRIBUNE).

HEALTH: An OKLAHOMA-based meat company recalls 497,000 pounds of ground beef processed at a NEBRASKA plant for possible E. coli contamination. The recall was for meats distributed at Sam's Club stores in 10 states -- FLORIDA, GEORGIA, ILLINOIS, INDIANA, LOUISIANA, PENNSYLVANIA, NEW YORK, OHIO, UTAH, and WISCONSIN. It is the second time an E. coli contamination has forced a recall of beef from the plant. The first involved 25 million pounds of ground beef (CLEVELAND PLAIN DEALER). 

SOCIAL POLICY: Health officials in UTAH adjust the wording of a new statute that bans using public funds to pay for abortions in order to allow Beehive State hospitals to end certain pregnancies without breaking the law. The new terminology exempts clinical revenue, private investment funds, gifts and federal income from being classified as public money (SALT LAKE TRIBUNE). * A WASHINGTON court rules that barring gay and lesbian couples from marrying violates the Evergreen State constitution. The court stayed its decision, however, until the state Supreme Court reviews the case (LOS ANGELES TIMES). * The CALIFORNIA Senate rejects AB 858, a bill that would have barred public schools from using "Redskins" as a team, mascot or publication name. The bill fell four votes short, leading supporters to say they will try again (SAN FRANCISCO CHRONICLE). 

POTPOURRI: Energy officials in VERMONT give the green light to the nations's first program to allow consumers to buy renewable energy made from cow manure. The Green Mountain State's largest utility plans to start selling Cow Power electricity, which will be generated by burning methane gas derived from cow flop. Consumers must sign up for the bovine-boost, which will cost an additional 4-cents per kilowatt-hour (RUTLAND HERALD). 
 

-- Compiled by RICH EHISEN

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Once around the statehouse lightly

BRING IT ON. It isn't exactly the message on the Statue of Liberty, but one TEXAS county would like it to be known that it welcomes -- if not your tired and your poor -- at least your low-level nuclear waste. Andrews County, which lies near the border with NEW MEXICO, wants the waste from hospitals and nuke power plants because, according to The Associated Press, it means jobs and a boost to the local economy. Among the states being courted are NEBRASKA, OKLAHOMA, KANSAS, LOUISIANA and ARKANSAS.

TAKE IT OFF. The governor of HAWAII has fired a broadside in the general direction of R.J. Reynolds -- the giant, NORTH CAROLINA-based tobacco company. Seems that Reynolds has issued a new pineapple-and-coconut flavored cigarette for its Camel brand and called it "Kauai Kolada." That, reports The Associated Press, was unacceptable to Gov. Linda Lingle, who asked that the tobacco company remove the name "Kauai" and stop using a hula girl to promote its new product. The association with Hawaii, sniffed Lingle, is offensive.

TOOK OFF. No one knows quite what happened, including the Democrats who funded him, but the Democratic candidate in CALIFORNIA's 63rd Assembly District has disappeared -- if he ever existed at all. According to the San Bernardino Sun and California Journal magazine, D'Andre McNamee, who ran unopposed for the Democratic nomination during the March primary, recently bowed out of the race by issuing a statement that "family and business concerns" forced him to stop his candidacy. The statement was not issued by McNamee, however, but by someone claiming to be a friend. More to the point, McNamee has failed to respond to many attempts to contact him over the past few months, and neither he nor his company is listed in what his candidacy papers claimed was his hometown of Upland. A spokesman for legislative Democrats, who keep close tabs on the candidates who run under their banner, had never heard of McNamee. In the end, it doesn't matter. The 63rd District, located in the heart of California's Inland Empire, is rock-solid Republican.

GOOD COP. BAD COP. ME. The usual technique is for two people to work over the suspect -- one to threaten, the other to cajole. But CALIFORNIA Gov. Arnold Schwarzenegger, a Republican, has developed a new twist when it comes to dealing with the Democrat-dominated Legislature. He's both the good cop and the bad cop. On one hand, the governor goes out of his way to praise lawmakers as his "partners," and to sing the virtues of bipartisan cooperation. At other times, as California Journal reports, Schwarzenegger gives speeches like one last week to a local government conference, where he bashed the Legislature as "spending addicts who need outside intervention, and I am that intervention. They need to wind down."

NO LAUGHING MATTER. More than one comedian has centered his or her routine on a case of the hiccups. But PENNSYLVANIA state Rep. Larry Roberts sees no humor in the hiccups these days. As the Pittsburgh Post-Gazette reports, Roberts has spent nearly three weeks in the hospital with a case of -- yep -- hiccups. Roberts has what is known as "persistent hiccups," which is a bout that lasts more than 48 hours. If it continues for another few weeks without a cure, Roberts will be suffering from "intractable hiccups." He's been hospitalized for tests to determine a cause, which is the only way to develop a cure. According to an aide, Roberts' constituents are trying to help by suggesting cures. The latest: drinking water with a pencil between his teeth. 
 

-- By A.G. BLOCK

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Executive Editor: A.G. Block
Associate Editors: Rich Ehisen, Korey Clark
Editorial Advisor: Lou Cannon
Correspondents: Richard Cox (CA), Steve Karas (CA), 
Bruce McKeeman (CA), Kelli Harvell (FL), 
Linda Mendenhall (IL), Lauren King (MA) 
and Troy Cassel (PA)
Design: Richard Hansen, Heather Conway

Copyright 2004 State Net
ISSN: 1521-8449